Canceling dinner reservations could now have ‘devastating’ effects for a restaurant

Business

The White Lion pub seen at Covent Garden, UK.
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As countries come out of lockdown, pub and restaurant owners have a simple plea for punters: honor your bookings.  

Drinkers and diners who fail to cancel before blowing off a reservation were estimated to cost the British hospitality industry £16 billion ($22.2 billion) in 2019. Now, after more than a year of diminished trade, what was once a social sin could prove to be a poison pill.

Pubs, whose appeal lies in providing a license to let loose, are uniquely vulnerable to Covid-19 restrictions. The U.K. lost more than 2,700 of them in January and February alone, on top of 12,000 or so more that research consultancy CGA reckons had to shut their doors for good last year. That’s more than one pub going bust every hour.

In America, the situation is equally dire. The National Restaurant Association estimates that 110,000 eating and drinking places had shut for the long term — if not for good — by Dec. 2020, as the industry lost out on almost a quarter of a trillion dollars.

Of those eating and drinking places, bars and taverns were hit hardest, with those that stayed open seeing sales fall by 65% on the year.

Even if President Joe Biden’s vaccine drive and infrastructure plans lay the groundwork for a miracle rebound, the association says gains this year “won’t be nearly enough” to make up for the sector’s Covid-19 losses.

Data compiled by reservations firm OpenTable lay bare the damage done. “Even more so now than ever as restaurants reopen,” said EMEA Vice President Lucy Taylor in a statement, “it is important we are all aware of the impact that no-shows can have.”

When customers don’t warn a pub or restaurant that they can’t make it to a booking, the venue is left holding the bag. Foursquare Group, an independent business advocacy based in the U.K., explains: “Hospitality venues use their booking information to schedule staff and ensure that they have enough stock to meet their orders. When a customer fails to arrive for their allocated booking, it’s almost impossible for a restaurant to resell that table without notice.” 

Egil Johansen, owner of The Kenton, a multi-award-winning pub in Hackney in east London, told CNBC in a phone call about his experience of no-shows when English pubs briefly reopened in December. 

“We were fully booked, and one Friday 30 people didn’t show up. We’d been turning people away. Those no-shows represented around half our indoor capacity,” he said.

Johansen called the loss of business “devastating,” highlighting some punters’ habit of booking tables at different venues for the same time slot, picking one and not canceling the others, as especially disheartening.

Covid-19 notwithstanding, around 60% of new restaurants didn’t last out their first year before the pandemic hit. Now, those establishments that have survived walk a fine line to keep the lights on: compliance with social-distancing rules guts the number of people businesses can serve, and in many cases forces them to pare down their trading hours.

Venues are able to serve small groups outside again in England, and there is hope the sector can recover — the latest data from CGA shows nearly half of English adults had already returned to hospitality within a week of reopening. 

At The Kenton, Johansen says he was “very nervous” waiting to open his doors on April 12. The Monday before, he built a roof over the beer garden in case visitors were put off by the city’s notoriously fickle weather.

In a bid to reduce the number of no-showers, Foursquare Group has launched the #SaveMySeat campaign, calling on the public to pay a deposit when they make a table reservation. 

Louise Kissack, the group’s non-executive director of hospitality, says the aim is “to help customers understand that when your local independent restaurant asks you for a small deposit on booking, it’s simply their way of safeguarding their business and protecting their future.”

For its part, OpenTable also penalizes people who don’t turn up. Lucy Taylor explains: “repeat offenders who don’t show up for a reservation four times within 12 months are prohibited from making future reservations via the app and website.”

Johansen has taken a different tack — one he calls a “deterrent, not a deposit.” The Kenton doesn’t take deposits on booking, but it does ask for visitors’ card details. “No money leaves your account, unless you don’t turn up,” he says. “The regulars don’t mind it, since they’re used to putting a card behind the bar anyway. If people are serious about showing up, they’ll provide their details.”

It’s still early days in England’s reopening, but when Johansen spoke to CNBC, the Kenton had been at full capacity every night, with no no-shows. On that first night, he says, “the mood just lifted.”

Pub attendance has caused him one problem, though. “I’ve had to put in another order with my supplier,” he laughs. “I might not be able to meet the demand otherwise.”

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